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The value of financing your property purchase in Menorca

The property market in Menorca has been an attractive and growing market for many years. This island, located in the heart of the Mediterranean, has captured the attention of investors and buyers due to its natural beauty and relaxed lifestyle. Within the island, some of the most popular locations are the charming towns of Ciutadella, Mahon and Es Mercadal.


Buying a property in a foreign country involves considering various aspects, as each country has its own real estate and tax laws. It is therefore essential to have accurate information about buying and owning property in Spain, particularly, in the Balearic Islands. In collaboration with Lionsgate Capital, the leading mortgage brokers in the Balearic Islands, we analyze why financing your property investment in Menorca can be a strategic choice.

 Mahón
- Lionsgate Capital

Financing or buying with your own funds?

Even if you have enough funds to buy your property in Menorca without a mortgage, you should be aware of the advantages of financing before making your decision. Financing the purchase of a property in Spain, and particularly in the Balearic Islands, offers key benefits that could make this option more attractive than paying fully with cash.

The main advantages of financing a property in Spain

Once you are in the process of searching for the perfect home in Menorca, it is time to decide whether to finance the purchase or to do it with your own funds. Here are some of the main reasons why financing may be the smarter option:

  • Tax deductions: In the Balearic Islands, properties valued at more than 3 million euros are subject to Wealth Tax, which is payable annually, even if you are not a resident. Mortgages are tax deductible, which makes financing especially attractive for high-value properties.
  • Maintain liquidity: Even if you have the capital available, it is not necessary to commit all your liquidity to a single asset.
  • Investment diversification: By opting for a mortgage, you can diversify your money into other areas that offer a higher return on investment - in the end, it's all about numbers!


More advantages of financing a property in Spain


  • Low or no early repayment penalties: Unlike other countries, in Spain it is possible to repay your mortgage early with minimal or no penalties.
  • Favorable interest rates: Interest rates in Spain remain competitive compared to other European countries, which in the long term can benefit your overall investment.
  • Appreciation in value: Menorca remains a safe bet, and property appreciation can generate a significant return on the initial investment, as a mortgage can be used to purchase a higher-value property.

How to obtain a mortgage in Spain?

Buying a property in Spain with a mortgage is possible for both residents and non-residents. Generally, non-residents will be able to obtain financing of a maximum of 70%, while residents have access to a maximum of 80% of the purchase price or the appraisal value (always the lower of the two values).

When buying, it is recommended to calculate an additional 10% to 14% of the purchase price to cover the costs and taxes related to the transaction (notary, registration, administration and taxes). The costs vary depending on the purchase price.

In Spain, there are different types of mortgages, depending on the characteristics and needs of each person. Most mortgages are for the purchase of a first or second home, but there are also mortgages for new builds and construction, commercial mortgages, Lombard loans and mortgages with a grace period for large amounts.

 Mahón
- Lionsgate Capital

The importance of professional financial advice

When considering financing the purchase of a property in Menorca, it is essential to go to the right professionals. Although it may be tempting to go directly to a bank, especially if the buyer is a non-resident, it is crucial to understand that not all banks in Spain are the same and that financing in Spain works differently from your home country. To save time, effort and money, it is always advisable to go directly to a team of local mortgage brokers such as Lionsgate Capital.

Lionsgate Capital is the leading mortgage brokerage firm in the Balearic Islands, specializing in high-net-worth, HNW, non-resident clients. Their team of multilingual experts are a contact for all banks in Spain and private banks in other European jurisdictions, enabling them to obtain the best conditions and interest rates for each of their clients.

The Lionsgate Capital team will make sure to optimize your real estate investment by obtaining the best mortgage or financial solution tailored to your personal circumstances, needs and preferences.

The Mortgage Calculator of Lionsgate Capital

In collaboration with Engel & Völkers Menorca, the Lionsgate Capital team will make sure to maximize your real estate investment!

 Mahón
- Mortgage_Calculator
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Engel & Völkers
Licence Partner Menorca

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